Mortgage Mop-Up

January 27, 2016

Managing the customer experience after TRID

By Jeanne Erickson

Community banks worked diligently to prepare for the TILA-RESPA Integrated Disclosure rule’s effective date last fall. However, no regulation as complex as the so-called TRID rule is implemented flawlessly. There are always areas for improvement.

From speaking with community bankers and participating in industry events, Wolters Kluwer has identified three areas for lenders to review: 1) readiness of their settlement agents; 2) employee training; and 3) customer experience tracking.

1. Outside settlement agents. Lenders bear the biggest liability in ensuring all steps of the mortgage origination process comply with TRID’s disclosure requirements. This requires lenders to be proactive in verifying that all settlement agents involved in the origination process have in place the compliant workflows required to process the new Closing Disclosure.

Most settlement agents have updated their workflows to accommodate the new disclosures, but some have not. The settlement agents who are falling behind in preparing for TRID are commonly small, independent operators.

Staying informed of regulatory changes can be difficult for organizations that are small and have limited resources. This means that as the originator of the mortgage loan, lenders have the added responsibility of helping settlement agents who are not TRID compliant. For example, if a settlement agent is not familiar with the Loan Estimate and Closing Disclosure and has requested the HUD-1/1A to complete the loan, lenders need to be ready to educate them on TRID’s compliance requirements. This not only protects lenders from potential compliance violations but also their relationships with customers.

Once the customer is at the closing table, you as the lender have transferred your relationship with the customer to the settlement agent. To help the loan-closing process go smoothly, settlement agents need to be able to explain TRID’s requirements to consumers.

Consider repurposing the materials you’ve developed to train your loan officers on TRID to help educate settlement agents. Also consider hosting TRID-specific trainings for settlement agents in your community.

2. Customer education. Going back to the customer experience, loan officers are often a customer’s first point of contact when requesting information about a mortgage loan and receiving details about TRID. A majority of consumers are not familiar with the regulation or its requirements. Loan officers who can confidently explain the new mortgage disclosures, triggering events and timing requirements can build credibility with consumers. It also becomes important to explain that delays could occur if a loan’s supporting documentation is submitted late or if the customer requests a change in loan type.

Providing loan officers with specific print or digital materials to educate customers on the mortgage loan origination process is a smart step.

3. Busting bottlenecks. When the mortgage origination workflow is running efficiently, with all compliance requirements met, customers will experience a smoother lending process. Getting to the perfect operational state, however, is never easy. At this early stage, the implementation of any regulation on the scale of TRID means that there are going to be workflow bottlenecks to resolve. Lenders can help identify and alleviate these challenges by tracking the bottlenecks experienced by their customers during the origination process, and logging the data into their compliance management system. Recording the bottlenecks gives you the data to identify recurring issues to help implement a solution.

By being proactive in helping settlement agents comply with TRID, educating loan officers and consumers about the regulation’s requirements, along with recording the workflow bottlenecks your customers’ experience during the origination process, your community bank can better manage the complexity of the new mortgage disclosure rules.

Jeanne Erickson (jeanne.erickson@wolterskluwer.com) is a senior attorney at Wolters Kluwer Financial Services, an ICBA Preferred Service Provider of compliance risk-management technology based in Minneapolis.